What happens when the Kyoto Protocol expires?

For a post-Kyoto treaty to succeed, developing polluters like China, India and Brazil would have to play a part. The Brazilian Amazon is being deforested rapidly by loggers, ranchers, farmers and developers.

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A post-2012 climate-change agreement would have to address factors that have stood in the way of the success of the Kyoto Protocol. Two of the major changes on the table are a shift in focus from mitigation to adaptation and the establishment of a global carbon-exchange market.

More than ever, the world's economies are inextricably intertwined. One hope with a post-Kyoto agreement is that the world might use this to its environmental advantage, essentially making it economically beneficial for the entire globe to work together toward mitigating climate change. One approach to that is a global carbon market. Many countries, including the United States and Britain, already have carbon trading markets, where companies can trade carbon credits (see How the Chicago Climate Exchange Works to learn about the United States' version). This basically means that a company that meets or exceeds its pollution-reduction goals can sell "carbon credits" to another company that isn't meeting its goals. The idea is to bring emissions down on average by turning "green" practices into moneymakers. With the meteoric rise of international trade, creating a worldwide carbon market could be an effective way to make reducing emissions a financial player on a global scale.

Another big issue is the failure of the Kyoto Protocol to fully address issues of adaptation for developing countries. Kyoto focused mostly on mitigation of current pollution levels, as opposed to changes that would bring the majority of the world into a more Earth-friendly economic stance. For wealthy countries, adaptation is a viable (if expensive) move. But for poorer countries like South Africa or even China, a shift in production methods may not be realistic. In the Kyoto Protocol, a fund was set up whereby a small percentage of the money spent by a developed country on a clean-energy project in a developing country goes into an adaptation fund. This fund is used for adaptation efforts in poor countries. Nine billion dollars has been collected so far under Kyoto; the World Bank estimates that it would take up to $40 billion to really make a difference in developing countries [source: Haag]. To collect this much money, the new agreement will have to make adaptation a prime focus.

Finally, some developing countries that were exempt from commitments under the Kyoto Protocol, like China, India and Brazil, will have to be included in a new agreement based on their polluting levels. China and India are industrializing at a rate that would cancel out other countries' reductions. Brazil is a major emitter due to its deforestation practices since plants absorb carbon dioxide. When major tracts of forest are eliminated, all of that carbon is pumped into the environment. Highly polluting developing countries will have to make commitments under the new agreement if it is to make a real dent in global emissions. And the new agreement will have to make it economically beneficial for them.

At the 2007 summit in Washington, D.C., China, India and Brazil did agree to make commitments under a post-Kyoto treaty. With China and India participating, along with a U.S. political shift to a Democrat-controlled Congress and presidential branch, it becomes far more likely that the United States will ratify a new agreement.

The timing of that new agreement is crucial. When negotiations began in Thailand in March 2008, delegates agreed to reach a new treaty by the end of 2009. It's unclear at this point whether that's a realistic time frame. Some think 2010 is more likely. The hope is that an early agreement will give countries and companies enough time to prepare for the change, and therefore make success more likely the second time around.

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